Episode 92: Reimagining the Way We Collaborate (with Adam Waterscheid and Ben Taylor)

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

The product spanned 9 different items across 151,000 units in less than 6 weeks.

Last year, we were sitting in the showroom of Chameleon-like, and along with Pierre and his team, Denise Tashrow with Fareware and Steven Musgrave were wishlisting some of their ideas for the future. And one of the things Denise mentioned was this idea of someday suppliers collaborating together to create collections for the distributor and end client. But not just collections of merchandise, but working together to create a cohesive offering that enhanced and complemented the collection and streamlined the work behind the scenes. That same idea sparked between two suppliers who are now tearing down the walls and transforming the way we can all work together to build a unified, creative, and for the most part frictionless concept in one offering for the buyer. Today, we explore what this new era of collaboration looks like with Adam Walterscheid, CEO of Tee Tycoon, and your co— and Ben Taylor, the Chief Marketing Officer at BamBams. They shared the story of a complex project that would become Collabs, a service designed for distributors to build a completely custom product collection that transcends multiple supplier lines, simplifying the supply chain, sharing creative resources, and streamlining communication through one contact. This episode is brought to you by Commenscue, the platform that empowers your connected workflow, enabling you to process more orders and dramatically grow your sales. 2019 is your year. Don't delay, start it right. Begin your free trial now at commonskew.com. And now I'm joined by Mark Graham, Commonsku's co-founder and chief platform officer, as we chat with Ben and Adam about a complex story that led to the creation of a model that reimagines the way we create called Collabs.

Can you help us understand Collab and what it means to distributor today?

We launched with one major project. We tested the waters first, collaborating with each other, figuring out how to work on projects, learning each other's product line. I spent a lot of time in Dallas, and Adam spent a lot of time with us on the phone and his team on the phone up here trying to understand how we both do business efficiently together.

Tell us about that project.

You know, it all started with, with a party in Vegas. Met just a fine gentleman. We meet and he starts talking about his client and a potential, you know, need for a custom collection all built from the ground up, nothing from stock. And so really, you know, we kind of stayed together and just kept talking through that project a little bit, and, and the project became real. The budgets got moved. It flowed through an agency that then flowed into the distributor. It was really cool watching and being part of that creative process that goes in at a, at a creative level and kind of nails the looks and the trend reports and all the things that they needed to see to kind of go, yeah, let's do this. And let's not just do this on a website. Let's not just do this for North America. Let's do this globally. We've got 32 markets that could participate. Couple thousand franchisees on top, and let's just see what we get. And here's the quantities and the things that we want to do. And it's a pre-booked program. So being part of helping build that strategy to a pre-booked program, how do you do it? How do you execute it? How do you meet the timelines of the clients, the safety? What do you mean pre-book program where you take the orders and you sell the orders before you just take position of inventory? Right, right. So, so at the end of the day, it boils down to we're distributing product that's already sold and we're building to, you know, demand. Yeah, almost in a, in a one-to-one model, but there's probably going to be some overstock and stuff. There's, there was obviously influencers involved, so that was, that was the same product, just a whole nother time frame, a whole nother delivery. But ultimately, it was really impressive to sit down and watch how that works from the top down and how to, how to marry it all in and then plan for it. Specifically, I mean, this particular brand is just known for its standards and for its testing and, and compliances and all these different things. So working through and setting up the factory assessment investments to get the factories on the radar that are going to make the product. The product spanned 9 different items across 151,000 units in less than 6 weeks.

From concept to completion, or you're talking just production time?

That's basically production time. And then it was another 3 months on top where we obviously designed— did we did trend reports, we designed in with feedback, and then prototyped into approvals, and then obviously moved into testing, which then moved into production. And into delivery. So really, the timeframe started when they approved the product.

Why do you think this distributor felt that you were uniquely positioned to produce this order over all the other options this distributor would have had at their disposal?

Well, I mean, it's just the way we work. That's part of being a supply chain is that you have resources and you can move quickly. So instead of telling them what I was going to do about it, I just went and made it and did it. So if they wanted their product step and repeat all over dye subbed into an adult onesie, I said, fine, send me one and I'll make you a size run. I'll do it this way to spec to meet your testing standards and this type of fabric so that it meets this type of potential look for the novelty item you're trying to get down to and made sure it met their demographic needs and, you know, let them know, look, this was going to be about the budget it would cost to get it done and you would need to be in these quantities to make it make sense. They positioned it as that item that they needed for it to work, and they really pushed it hard and made sure that the total number of units made sense. We also did denim jackets with 18 different heat transfer patches that went on it so that it really looked like that vintage novelty denim jacket that they got, you know, 20 years ago, when in reality they got it, you know, 6 months. So we had lots of fun items. I mean, the reality of it was is that we tried to leverage domestic manufacturing the, the most we could because it gave us the most control. It gave us the smallest turn times. It didn't necessarily give us the cheapest price, but that's not what this was about. It was about execution. It was tied around the World Cup, so there was a tight window to it. And, you know, in the United States, that's one thing, but to the rest of the world, the World Cup is obviously the deal. They wait 4 years for it. So that was obviously an important time frame inside the project. And so our job was simple. It was to give them one company to deal with through all the compliances, all the safety standards, all the products, all the delivery, all logistics, all the price points, all the product development, and streamline that process into what turned into single delivery point where they handle fulfillment globally and were able to take control of the project at distribution, which was important. Right.

I have an observation here and I'd love to get your perspective on this, Bobby, given your past distributor experience. And I'm also weighing on my, uh, my distributor experience as well. I think when you're doing a large, complicated global sourcing deal, like the one that you're just talking about, Ben and Adam, Very generally speaking, I think a distributor has 3 options. Option number 1 is they go to China themselves and they go and source directly from a factory, and they're usually doing this because they're trying to meet a certain price point, and there's a degree of flexibility there going direct to China. Of course, all the risks that are associated with that notwithstanding, but that's certainly one option that you see. The other option that you see is that a distributor will go to a large traditional supplier in the industry and will tap their custom sourcing division for a riff on an in-stock product. And that can be a very successful strategy as well. But I think that one of the limitations that you get with working with those established suppliers is that lead time's generally a little bit longer. There's also a little bit less flexibility because they're working off of a stock product design that they're already comfortable with, and it's a slight customization on top of that. But then of course you might not be able to get everything through that supplier. So you're now interacting with a couple of different suppliers. So the challenge there is that you may just run into inflexibility when it comes to delivery timelines. And I think the third option is the one that you're now talking about, Ben and Adam, where it's like this new almost hybrid approach where you've got this nimble supplier or the supplier relationship in terms of co-lab where they're able to go to the market and are able to work on your behalf in a really aggressive timeframe as well as an aggressive budget window as well to be able to meet this one single delivery of a very complicated project. And I think it's, it's interesting that the industry has evolved there because now distributors have, I think, a safer option in option number 3 to be able to deliver aggressively on price and deliver aggressively on a timeframe. That they might not have had before that pushed them to go direct to China, where then you get, I think, a lot of problems that we see in the industry today. So that's my observation. Bobby, what, what do you think given your past distributor experience?

Yeah, the timeframe is tremendous. I was kind of intrigued, you know, obviously with our fulfillment background, I was thinking through what a beautiful program this was with a pre-booked project. Those are increasing, I think, in the business because of the way production has shifted. And so no longer are these heavy fulfillment inventory, heavy inventory programs. You're seeing a lot more just-in-time type projects. But I was mostly intrigued by how this distributor differentiated themselves through the uniqueness of the creative process and through partners, obviously, like T-Shirt Tycoon and BamBam's, how today it's not just the logistics side of the business where you're able to shine more, but also the creative side. Where tapping into the right partners can really, really expand your creative prowess. And so I was impressed by just the customization side, and the fact that this was basically a 3-month project, if I understood you right, Adam, is pretty astounding given the scope of it.

I think what makes CoLab in itself work so well from a creative aspect and from a fulfillment aspect— and even Mark, to touch on what you said, this goes back to a conversation Bobby and I are having right before we started this today— is, wow, you travel a lot. Yeah, 40 weeks a year along with all these other suppliers. And what that's allowed us to do is build unbelievable and very trusting relationships with all of the other suppliers in our industry. We learned who works really well, who we know we can work well together with, how to deliver their product. Heck, we know their product lines most likely better than a lot of distributors because we spend so much time with these people. And it's allowed us to build a network of collaboration. We first did it last year— T-Shirt Tycoon, BamBam's, ETS Express, Alight Promos, Gold Star, and Auric Audio. We had a party, right? And a party that would allow us to introduce each other to each other's client base and really learn more about each other. And it's really just grown from there. And I think this project in particular, from a creative aspect, was really cool because unlike a lot of standard promo product buys, this also had true advertising agencies, you know, world-renowned advertising agencies involved with it. And so they got to work on creative, and then T-Shirt Tycoon got to work on creative, and then BamBam's got to work on creative with T-Shirt Tycoon. And so you have people all the way across the board from that end user, that major social media influencer, some guy or gal with a million plus followers on Instagram who's gonna be wearing this product, giving their input to the advertising agency, advertising giving their agency to the client, client giving their, their input to T-Shirt Tycoon and BamBams. And us as the makers, the manufacturers, the actual people who make this product, we know what, what's gonna work best. And we all put our heads together. It really is a beautiful thing when it comes to a design perspective.

Working backwards in the project is how we got there. And it was a lot about showing them what their audience might like to see and retail brands that carry that look. And then it was from there, it was like, okay, how do we build your brand DNA into it? And how do we work backwards into budgets that work for you to pre-sell this into? And if you don't hit a number in a particular item, you can always choose to order it and carry it, or you can simply cancel out of it and move on down the road. And the only thing we've got is pre-pros on the line., you know, no big deal for something like a global launch or a national launch or even a, you know, an online store launch. So really nimble way of going into, let's go pre-book a couple hundred units and then what we can look at that data and tell us how much more we need to do to meet demand or at least get you in position to start to know that.

We've talked a lot about how to do this right. I know that also when working with a complicated global fulfillment program with a picky end client that not everything goes right. Are there some stories that you can tell about where there were some challenges in the production of this order?

Absolutely.

I think in any order you're going to have challenges. You get an order that's on this scale, we're definitely going to run into some hiccups. And a lot of times that's about learning. And I think Adam and I both learned a ton about compliance and a ton about product testing and when to produce and how to produce things and really product approvals and the line of communication that is required and the level of communication that is required. That being said, we ended up in a situation where we had to reproduce a little north of 3,000 more units, and we had to reproduce on a, on a global scale really fast with people having to go other places and having to bring in specialized teams to do things.

This test was, it was an EU test, one that we're not required by law to pass because we don't manufacture and distribute in the EU. We weren't compliant to it, but it was a specific standard that was required by the brand, and we didn't know about that at the time of testing, so we didn't spec the product exactly to that standard. So we had to respec it and reproduce it and deliver it in a time frame that let them reset their, their whole calendar as far as the program goes.

Let me touch on that too, because one of the coolest parts about this entire process, at least for me, Adam, is as much as it was struggling, the super late nights, learning about getting an education on global compliance, it was invaluable at the same time. And when you have to pass, you know, reach testing for the EU learning, and this is, you know, significantly more intense than Prop 65. And, you know, as a company that's delivered into the European Union a number of times, there's different rules every single time. And we were a little bit unaware and we had a lot to do. But I think one of the coolest things was, was making sure that our factories— and, and not to, not to say this is why you shouldn't go to China directly yourself, especially on a project this size, but this is something that having those long-lasting relationships with the factories, or them having be our own factories that we actually own, Getting that compliance across the board is so vital. If we couldn't get that compliance across the board, this project fails. And we busted our butt to do it. It was really pretty cool watching all that come together and going through that process to make sure that we were compliant.

Well, and you guys know as much as anybody, the first time you build something is probably not your best effort. So the second time you do it, you're probably twice as good as the first. So we were able to really step up and deliver on it. But we learned, look, we've got to test product earlier in the process. Us. That's the key to this whole thing. And I think that experience as a supply chain going in with a distributor that's done this before, first of all, or hasn't, we certainly can bring a level of experience and knowledge to the table of exactly how to get all this key information out in front and get the plan set early so that we can deliver 100% on the first time. But the reality is, is that it was a highly successful program for the brand that executed it. And you don't have to take my word for it. You could look at one hashtag of how they measured it and documented it and know exactly the brand equity that they, that they were able to build inside of their brand globally. It was, it was great. Their influencers all the way down to the product reception. We got nothing but great news and it was just more about hitting that timeline that was tied to a lot of key moments of their, of their marketing spend, right? So just really all the way to the top of the executive saying, here's the budget, here's the window, here's the leverage we're trying to create and us delivering on it.

Yeah, and I want to stress, our listeners are used to a full disclosure discussion, and we're being very respectful of the distributor that's involved in this project. So that's by design. But what a project. I have to say, when I hear about this, you know, I hear about the problems, I hear about the challenges. I think we take it for granted just how much education our supplier partners do and get on our behalf to make us look like absolute heroes. And it's the high risk that you guys take, and you build upon that. Obviously, every experience is a new opportunity for you. Also, this project just ignites my imagination. And I'm thinking of— we have distributors who are brand new to the business that are on the call. We have distributors who have been doing this a very long time. This is one of those rare projects that I hear from— I don't care how experienced you are in this business, this is an incredible opportunity to tap into something very unique on behalf of your clients. So I kind of have a question for all three of you so that we can help distributors mine this rich trove of trust they have with existing clients. How do you mine those relationships? Come up with the right types of projects or the right types of clients that would need something like this. Mark, you've done a lot of creative projects, apparel projects. When you hear about this with Adam and Ben and Colab and what they've done on a global scale, what is it you're hearing that's different through your mind as a merchandise creator for years that's unique to this?

What I think is really compelling about this is at a distributorship like Right Sleeve, we're really focused on the brand identity of the particular merchandise collection that we're creating. So it's really important if we're doing a domestic or an offshore program that we've got supply chain partner that can be nimble, can be flexible, can be very quick to get back to us with changes. Because whenever you're doing a creative program, the client in general has got higher expectations. So they can be higher maintenance than your average client who just needs a one-color logo on 1,000 pens that need to be shipped out next week. Those projects are a little bit easier to execute. So when working on something that's a little bit more complex, it's important to have a supplier who can really be partnered with you, but not in the, not in the lip service way, but we're talking like really partnered and joined at the hip with you so they can produce this really elegantly because there's going to be a lot of moving pieces and a lot of changes. And what's interesting about this co-lab value proposition And I touched on a little bit earlier on is that there's not really a lot of compelling options on the supply side to be able to allow you to do this from a global perspective. There's lots of vendors that can execute this domestically because domestically you've got the advantage of quicker turns. But when you're, when you're looking at something that's offshore, you've got longer turn times and you've also got the complexity of global distribution. So if you can have a partner that is nimble, not too loaded down with bureaucracy at the supplier end, so they can respond to you very quickly, then I think that's really, really interesting. And, uh, and that's why I made that comment before that, that I, I think up until now you don't really have a lot of options that are other than going direct to China and dealing with the factories yourself or dealing with a larger supplier that may be a little bit more set in their ways in order to get the job done. There's not a lot of other options in the middle, and I think that's what's exciting about this value proposition that we're hearing about today.

That's what Collab is. It's going to be a collaboration of creative companies coming together for one, one complete solution for the distributor. I think it's pretty cool.

What's kind of neat about this is you see a lot of buying groups on the distributor side where a group of like-minded independent distributors will get together in different markets and they come together so they can collaborate and they can develop relationships with a core group of suppliers, and they can trade best practices, and they can get better pricing, like all that good stuff. And that's been around for a long time. But you don't see that on the supplier side. On the supplier side, if you do see that, it's usually through some kind of acquisition. And I think that that's another dimension to this story, Ben and Adam, that I think is really interesting, is that the two of you have come together. You're in very different product lines, different parts of the country. You're clearly collaborating and sharing best practice, uh, like a distributor buying group It's like you're the reverse. And so now you're coming to the market as this group of independently minded suppliers that all like doing business with each other. There's, there's not a lot of overlapping product and you can come together to create one solution for a distributor partner. I think that in and of itself could be the start of an interesting trend. And who knows, maybe you end up acquiring one another at some point, or that may never happen. And you, you retain this independence, you retain this creative collaborative spirit across the board. And now that may represent a new way forward for a certain class of distributor that does not want to get gobbled up by a bigger supplier, but also doesn't want to stay totally independent on their own because they may struggle with the demands of what it means to be a supplier today. So I, I don't know if there's something to that or whether you had, uh, whether, whether you want to kickstart a trend, but that, that's interesting to me.

And they're 100% is. When we've had our initial conversations, we were like, A, the company, the suppliers have to be nimble. They have to be the type that buck the trend. Like Adam and I are, I wouldn't necessarily call us complete rebels, but we're not rule followers. We like to do things our own unique way. And the suppliers that we got involved, you look at the very beginning, the Auric Audios of the world and the ETSs and all that. These aren't people that are just doing everything 100%. This is only how we do it, right? Everybody's got to have that nimbleness, and we want to grow together and allow ourselves to grow together. I mean, there's, from a, from a business development and growth strategy, there's, we have our strategy in that for us to be able to, to rely on each other to expand our marketing budgets so that we can compete with the, you know, the top 10 suppliers in the world is important. This is how we've chosen to do it in a creative manner that we think brings true value to, to our industry, to distributors that can go chase these projects that kind of want to play with the big boys.

Yeah, let me say something about the supply chain right quick because, you know, the sense of urgency that a buying group gives a supplier— wow, look at all these great companies that have joined together to bring us a competitive advantage to market our services to and to go get the big boys— is kind of the flip side of what we're trying to bring, but we're bringing supply chain resources. Creative supply chain resources are critical because it kickstarts the process. Then you've got your sampling and then you've got your production. Domestically, there's only so many companies that can truly do this and hold their category down well. And then you've got limited resources from there in all 3 of those categories that deliver through production, sampling, and creative. So we're trying to bring a breed of business to the table that has suppliers that make you want to get in, create that sense of urgency like a buying group would for a supplier. We want to bring you supply chain resources that give you the same sense of urgency, you know, that you would give us inside of that larger group. And we're trying to, we're trying to help those that aren't, aren't ever going to be a Staples or, or one of these top 40 distributors where it really does differentiate you enough to compete as a tier 2 distributor. And that's just in the market cap, $23 billion, $5 billion of it being t-shirts. I, I certainly understand the scope of how I need to help translate my private label strategy into that number. And bringing suppliers like Ben and some of, some of our newer players is going to certainly hopefully bring a sense of urgency to the table and to get down to the calendar. How do we execute for you? And let's talk about your larger projects.

And I think it'll be interesting to see down the road, like if I'm a, if I'm a large supplier listening to this, to this podcast and I've got hard goods and I've got apparel and I've got a range of product categories that I can supply, I might be thinking, well, hang on a second, you can come to me. I can supply all this under one roof. It's going to be straightforward and easy. And that may very well be the case. But I think only time will tell as to which model is more flexible and more nimble. Option number 1, large supplier where everything is under one roof, or option number 2, this collab model where it's a network of independent suppliers that have come together to share creative resources that can ultimately deliver upon the project. And I think that your model is, is relatively new, so only time will tell, but I think that to my points before, I think we all know what some of the limitations are in working with a larger traditional supplier, that they have to have those rules that make them a little bit less flexible because they need those rules in order to deliver on time every time. Whereas in your case, you're purposely breaking those rules so you can be more creative when it comes to product sourcing and also delivering upon budgets. And then also just allows you to go and meet these crazy timelines that maybe some of these larger suppliers can't. So I think it's very exciting and really wish you guys very well as you continue to build out this model.

I want to stress this as somebody who's seen a lot of programs. I've read a ton of RFPs. I've seen so much program business. They're taking a traditional product category and they're sort of rebuilding it in a way that not only makes you more nimble, but makes you more creative. And what that does to the stickiness of your offering to your client is tremendous. So I'm going to suggest, or I'm going to say right now, that what you guys have built here is a very vibrant future for those that are willing and ready to tap into this and to think really outside the box. But it's funny because you can tap into— you can actually go after a traditional category in a very unique and creative way that carves that old spend into something fresh and new, and that also makes it very difficult to steal from you, so to speak, once you do that kind of creative collaboration.

If you look at this from a macro perspective, there's a lot of worry in the industry, rightly or wrongly, in the industry today on the supply side about the rapid consolidation that's taking place on the supplier side in the industry. A lot of external private equity funds that are coming in, there's a lot of mergers, and that's happening for very understandable reasons. There's a concern that at one point the industry might be 10 suppliers. I don't think that'll necessarily ever happen. You know, work with me on that sentiment. And I think the reason you see that is that if you're a new supplier getting into the, into the space and you're a creative entrepreneurial type, you get into the business, you don't have a lot of money, you can get wiped out by things like Prop 65 compliance. You can get wiped out by product testing. You can get wiped out by something as simple as a price war with a larger supplier that wants to shut you down. It's very, very difficult to compete as a smaller supplier. But if you can come into this industry as a small creative supplier and connect in with, with a movement like a collab or, or something similar, then I think it not only gives you as that smaller supplier, I, I think a brighter future, but I think it's also better for the industry because you have more competition, you've got more players, you've got, which, which brings more product innovation and just more options for the market. So I think for the industry, this is generally a better thing than, than a bad thing.

What did you guys learn through the collaboration process with distributors? Help us, help distributors understand how we can work better with you.

Adam? Well, what I learned about it was just understanding the calendar together. You know, what are the key milestones so that we can plan for them and deliver on them? Because the milestones are really what make the project. It's really what gives the client the confidence that you can get to the next level or the next stage and make them look good.

And obviously you're not saying milestones, we're used to hearing in-hand dates. You're talking about something far more complex here. You're talking about multiple milestones through a, through a very complex project.

Yeah, because there's, there's a lot of planning that takes place. I mean, a lot of the information that you need isn't available until certain stages of the project. So curating the information down to what is available to us to make good decisions and plan this appropriately isn't going to be perfect. So you got to get down to a calendar that everyone can, can, can agree to. And then that way we know we're on track. And as we learn more information, we have to then adjust the calendar according And I think you can manage a project that way, working backwards in price and quantities and timelines and brand guidelines. There's a very high chance of succeeding.

I'm in the same boat as Adam there. There's, when it comes to learning or explaining what we learned, I think it's just, it's really communication and understanding the guidelines. We can be the best for you if we know as many of the details as possible. And the earlier you can get us involved in that conversation, the better. A lot of times I see with distributors, they want to keep us from the conversation, especially with a client. We are more powerful and we are your advocate when we work together as partners and we want to be your partner. And so get us involved in that conversation because then we can win for you.

I see that that's imperative with this type of project. It's absolutely imperative not to hide, not to prevent or hide or obfuscate the details with the client and things like that. It's absolutely imperative to get you involved as fast as possible and in a very open book.

I would just, you know, I would just say that we're talking about private label product here. 100% private label. This is your client's brand. So why would they want to be part of the supply chain decisions and execution? It would be a phenomenal way to experience your own brand, would be to, to be connected to the supply chain that was helping you build it, and it'd be all about your brand. We are not companies that want to be in the forefront. We are your third-party, silent but very proud partner. So this is all about you as our distributor, and it's all about your, your end client.

What I love about this type of project too is that from the client's perspective, the distributor is the conductor. I mean, this is very symphonic. The distributor, we often think in a role like this, is helping bring together all the right players on behalf of the customer and their objectives. This isn't the old argument of supplier versus distributor and the client. Those rules are out with something like this because the client's very dependent upon the distributor's expertise in bringing the right partners to the table. And it's so complex that it actually creates a safety and security net for the distributor when you build something this creative.

Absolutely. And it builds true partnership. You could have said it better, Bobby.

Guys, this has been great. Thanks for unpacking this.

This is really cool, man. And you guys are— you guys are, in my opinion, I think, represent a very interesting part of the future of this industry. And a guy like me, and certainly Bobby is the same way, like, we get so fired up by people that are doing unique and cool things. And sure, I still love the big suppliers as well. Like, they're absolutely vital to the success of this business as well. They're just different, and I think we all have a place. And what you guys are doing is just cool and innovative, and, and we need more of that. We really do.

Yeah.

Yep, guys, thanks for your time. This has been awesome.

Sure, guys, thanks for having us. This is a lot of fun to do with you as always.

It was very therapeutic, gentlemen.

I appreciated this Thanks so much. Bye-bye. Thanks so much for tuning in to this episode of SKU Cast. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.commsku.com. Until next time, friends, thanks so much for listening.

Mm-hmm.